Child-only coverage on the Exchange

May 25, 2012

Are child-only plans allowed on the Exchange?

Section 1302 of the Affordable Care Act states that any qualified health plan offered on the Exchange at any metal level of coverage must also be offered as a corresponding child-only plan at the same metal level of coverage. For all plans BCBSM offers on the Exchange, BCBSM will also have to create a separate child-only option.

Issuers participating on the Exchange must offer at a minimum one gold and one silver plan on the Exchange, and therefore all issuers participating on the Exchange must offer, at minimum, one gold and one silver child-only plan on the Exchange.

What is included in a child-only plan?

Child-only plans must include the essential benefits and are tied to the same actuarial value categories as other plans on the Exchange. It is unclear what benefits constitute the essential health benefits at this time and we expect the state of Michigan to make a decision regarding essential benefits sometime in the fall of 2012. Blue Cross Blue Shield of Michigan will continue to monitor regulations and updates will be provided as soon as they become available.

Who qualifies for child-only policies?

Individuals who have not attained the age of 21 at the beginning of the plan year are eligible for child-only plans. However, according to the definition of "qualifying child," for purpose of determining tax dependency, a taxpayer cannot include children age 19 through 20 in determination of the taxpayer's premium tax credit eligibility, unless the 19- or 20-year-old fits the criteria for tax dependent status (example, the child is a student).

What about tax credits?

Premium tax credits are available to taxpayers who purchase coverage on behalf of a qualifying dependent child. A dependent child is defined in the IRS code as:

A child of the taxpayer or descendent of such child or the brother, sister, stepbrother, or stepsister of the taxpayer or a descendent of any such relative; and

Has the same principal place of abode as the taxpayer for more than half of the year; and

Has not turned 19 by the end of the calendar year, is a student who has not turned 24 but the end of the calendar year, or is permanently and totally disabled; and

Has not provided over one-half of his or her own support for the calendar year; and

Has not filed a joint return with his or her spouse.

The ACA specifies that the parent who claims the child on their tax return is responsible for providing that child with coverage. In some cases, this may not correspond with child or medical support orders.

Where can I find more information?

For more information, please see Section 1302 of the Affordable Care Act.

The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.